What is Enfranchisement? What is Enfranchisement? - PDF document

____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ What is Enfranchisement? What is Enfranchisement? ____________________________________ ____________________________________ ____________________________________ ____________________________________ • Refers to the process where participating leaseholders (tenants) acquire the freehold title of the building/block and grounds. ____________________________________ • The relevant law that regulates this process is found in the Leasehold Reform Housing and Urban Development Act 1993 (“the Act”) as amended. ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________

____________________________________ Preparation is key … Preparation is key … ____________________________________ Do I have the Do I have the right? right? ____________________________________ ____________________________________ ____________________________________ 50% of 50% of Does the Does the tenants tenants block qualify? block qualify? support? support? ____________________________________ ____________________________________ ‘Qualifying Tenant Qualifying Tenant’ ’ ‘ ____________________________________ • Must hold your flat via a long lease (for more than 21 years) • Must hold your flat via a long lease (for more than 21 years) ____________________________________ • Flat owners who own more than 2 flats in the building may not count as • Flat owners who own more than 2 flats in the building may not count as ‘qualifying tenants’ ‘qualifying tenants’ ____________________________________ ____________________________________ ____________________________________ ____________________________________ Does the building qualify? Does the building qualify? ____________________________________ • The flats must all be in a self contained building • The flats must all be in a self contained building ____________________________________ • No more than 25% of the building can be used for commercial space • No more than 25% of the building can be used for commercial space • At least 2/3rds of all of the flats in the building must be ‘qualifying • At least 2/3rds of all of the flats in the building must be ‘qualifying ____________________________________ tenancies’ (whether or not participating) tenancies’ (whether or not participating) ____________________________________ ____________________________________

____________________________________ Tenants’ Tenants ’ support support ____________________________________ • At least 50% of the leaseholders must participate, or 100% if the • At least 50% of the leaseholders must participate, or 100% if the building consists of 2 flats only. building consists of 2 flats only. ____________________________________ • Participation Agreement –set out the terms of the purchase from the • Participation Agreement –set out the terms of the purchase from the beginning. Not compulsory but highly recommended to ensure that al beginning. Not compulsory but highly recommended to ensure that al participating tenants understand their place in the process and their participating tenants understand their place in the process and their financial involvement. financial involvement. ____________________________________ ____________________________________ ____________________________________ ____________________________________ Other considerations Other considerations ____________________________________ Arranging Arranging Funding Funding ____________________________________ Participation Participation Agreement Agreement ____________________________________ Instructing Instructing ____________________________________ Valuer Valuer & & Solicitor Solicitor Nominee Nominee ____________________________________ Purchaser Purchaser ____________________________________ Procedure Procedure ____________________________________ Landlord’s Landlord’s Counter Notice Counter Notice ADMITTING ADMITTING Enfranchisement ____________________________________ Enfranchisement Participating Participating ____________________________________ Tenants’ Tenants’ Notice Notice ____________________________________ Landlord’s Landlord’s Counter Notice Counter Notice NOT ADMITTING NOT ADMITTING Enfranchisement ____________________________________ Enfranchisement

____________________________________ Tenant’ Tenant ’s Notice s Notice - - Acceptance Acceptance ____________________________________ Notice Notice ____________________________________ 2 months 2 months ____________________________________ Result! Result! Conveyance of ____________________________________ Conveyance of Freehold title Freehold title ____________________________________ ____________________________________ Landlord’ ’s Counter Notice s Counter Notice Landlord ____________________________________ 2 months 2 months ____________________________________ completion completion period period Agrees terms of Agrees terms of claim notice claim notice Additional 2 Additional 2 ____________________________________ months period months period Landlord admits Landlord admits to apply to court to apply to court claim claim Apply to Land Apply to Land Disputes terms Disputes terms Tribunal within 2 Tribunal within 2 of claim notice ____________________________________ of claim notice months months ____________________________________ ____________________________________ Landlord’ ’s Counter Notice s Counter Notice Landlord ____________________________________ ____________________________________ Landlord does Landlord does not admit not admit Notice Notice ____________________________________ Tenant apply to Tenant apply to Court for Court for declaration of declaration of ____________________________________ entitlement entitlement Court Order to Court Order to determine if determine if claim can claim can proceed proceed ____________________________________

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____________________________________ Method of valuation from Leaseholders and Freeholders viewpoint basically the existing term ____________________________________ and reversion. ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ Marriage value and effects on eventual figure applicable to unexpired terms of 80 years. ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ Any factors to be taken into consideration in the valuation for example future development of the ____________________________________ block/blocks. ____________________________________ This includes possible extra storey, backland development, etc. ____________________________________ ____________________________________ ____________________________________ Any planned maintenance by the management ____________________________________ company that may have an effect on value. ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________

____________________________________ Assumption that all blocks have a 75% g.i.a residential content. ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ Valuation will be on a best and worse case scenario ____________________________________ dependent on yields. ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ It would be helpful when the time comes to have ____________________________________ Land Registry plans and copies of leases, etc. ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ Graham Merrett ____________________________________ g.merrett@stonier-hobbs.com 01225 463322 ____________________________________ 10 Fountain Buildings Lansdown Road ____________________________________ Bath England BA1 5DU

Presentation Collective/ Leasehold Enfranchisement 20 October 2015 Stanton House Hotel Stanton Fitzwarren Swindon SN5 7SD